Using Excel, prepare: General journal entries to record the summary transactions and adjusting journal entries.

Sold merchandise on credit, $673,798. MSU Candy uses a periodic inventory system.

2. Collected 90% of these current credit sales.

3. Collected 95% of beginning accounts receivable.

4. Wrote off the remaining 5% of beginning accounts receivable.

b. 1. Purchased merchandise on credit, $339,170. MSU Candy uses a periodic inventory system.

2. Paid 85% of these purchases.

3. Paid all of beginning accounts payable. Continued on next page.

c. On April 1, 2012, paid $2,73O for a renewal of the insurance policy which will provide coverage for the period 4/1/12 to 4/1/13.

d. Supplies purchased for cash during the year $23,917.

e. On July 1, 2012, received cash consisting of a $3,000 payment of principal on the note receivable plus interest for six months @8.73%.

f. On January 1, 12, equipment costing $10,000 (with related accumulated depreciation of $3,600) was exchanged for different equipment having a FMV of $7,798. No cash was exchanged and the exchange had commercial substance.

g. Paid $67,980 for salaries and $10,730 for payroll taxes. Both of these amounts include the beginning liabilities for each, respectively.

h. 77.3% of the beginning Unearned Revenue was earned by year-end.

i. Dividends declared in 2011 were paid in January, 2012. Dividends of $6,798 were declared in December, 2012 and will be paid in January, 2013. Year-end adjusting entries:

aa. MSU Candy estimates that 5% of ending accounts receivable will become uncollectible.

bb. MSU Candys inventory count at 12/31/12 shows $57,980 of merchandise inventory remaining. Make an adjusting journal entry (AJE) to close purchases, adjust Merchandise Inventory to ending balance, and create a Cost of Goods Sold account.

cc. Adjust Prepaid Insurance to reflect insurance expired during the year.

dd. Supplies on hand at year-end totaled $5,798.

ee. Interest on the remaining note receivable was supposed to be received at 12/31/12; however, it did not arrive. Make an AJE to record interest receivable and interest income for second half of the year.

ff. Make adjusting entries to record depreciation expense on the building and equipment. MSU Candy uses SL, 20% SV, 40-year life for the building and DDB, No SV, 10-year life on the equipment.

gg. Unpaid salaries and payroll taxes at year-end were $13,917 and $3,798 respectively.

hh. A bank reconciliation prepared at 12/31/12 showed $10,000 deposits in transit, $7,000 outstanding checks, $673 bank service charges, and $1,798 interest earned. Optional entries:

ii. 30% tax rate (This exp/payable could just be calculated on IS and BS, but you can journalize it after all other work is done. )